Thursday :: Oct 23, 2008

$700 Billion Bank Bailout Now Used to Buy Bad Mortgages

by paradox

Beleaguered proponents of our $700 billion bailout insanity, embarrassed that the plan of great wisdom was hurriedly chucked into the bad idea bin so another sop to billionaires could be put into place, now get to comprehend that Treasury wants to use at least $40 billion dollars to buy bad mortgages.

What, that was never in the original bill or even discussed? Oh well. Maybe next time you won’t fork over a vast fortune of our money in a blind panic with no deliberation and not even an economist testifying. [deletes profane told-you-so’s, muttering]

Unfortunately the Reuters wire report on the subject is confusing and woefully incomplete on the matter. Treasury is “separately” going ahead with plans to buy mortgages, yet FDIC Chairwoman Sheila Bair is going to testify before Congress today that giving banks a financial incentive would convert troubled mortgages into good ones.

Meaning giving taxpayer money away to lying crooks is something they could go for, Jesus save us from softly bloviating obtuse public servants. Meaning whatever this useless testimony produces we’ll do it anyway, peons. One must assume “financial incentive” will mean the buying of bad mortgages, the language used by the Reuters reporter, but perhaps the FDIC will actually speak the plain detailed truth before Congress today so we can find out. Right.

One hypothetical in this taxpayer ripoff to the wealthiest among us is a person in an adjustable rate mortgage for $400,000 now worth $300,000. Instead of taking a paper loss of $100,000 for the bank and re-setting the impossible interest rate, the bank immediately gets to dump it all and get that 100 grand immediately.

As I reach for my Tums and Alleve I still find it hard to believe a US Congress could pass such vague legislation that Treasury could pay off banks this way, assuming the hypothetical is valid. This country wasn’t set up to rescue banks who so stupidly screwed up!

Oh but it is, glasshoppa, it is the way of our world now. I see. Well I’ve got a message for the next President and Congress: socialism for the rich and powerful is never freaking happening again in the next Congress, I doubt very much we’ll have executive leadership so arrogant and panicked to propose it, yes, but I also think the proponents of this un-Godly mess will have learned, finally, never to act so quickly, it’s always disastrous.

Part of that disaster can be seen in a State Attorney General (Cuomo) enforcing compensation and bonus sanity upon the executives of rescued AIG. Now why wouldn’t a Federal official or agency be handling that, since it was Federal money (ours) that bailed out AIG? Because our doofus reps in Congress gave the keys to our Treasury away like children, they don’t have a way to enforce even the most basic fairness and justice into the ripoff. Oy.

I’ll keep up on the specifics of this grand American dream of capitalism as I find them out. Please have a great day, everyone.

paradox :: 5:44 AM :: Comments (6) :: Digg It!